Cold rolling and trimming not treated as manufacture, so excise duty demand could not stand

Cold rolling and trimming of duty-paid hot rolled untrimmed sheets was treated as not amounting to manufacture, because the Tribunal had already decided the issue in the appellants' own case by applying the Supreme Court's ratio in Steel Strips Ltd. On that reasoning, the Revenue's view that excise duty could be fastened on the process was rejected, and the duty demand could not be sustained. The lower appellate authority's order was therefore set aside. The stated principle is that a process which does not amount to manufacture cannot form the basis for excise duty liability.

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Issues: Whether cold rolling and trimming of duty-paid hot rolled untrimmed sheets amounted to manufacture so as to attract duty liability.

Analysis: The issue had already been decided in the appellants' favour in an earlier decision of the Tribunal in the appellants' own case, following the ratio of the Supreme Court in Steel Strips Ltd. The process of cold rolling and trimming was held not to amount to manufacture, and the Revenue's contrary view was rejected. On the same reasoning, the order confirming duty liability could not be sustained.

Conclusion: The process did not amount to manufacture and the duty demand was unsustainable.

Final Conclusion: The appeal succeeded and the order of the lower appellate authority was set aside.

Ratio Decidendi: A process that does not amount to manufacture cannot be the basis for fastening excise duty liability.

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